Merlin Entertainments to unveil record annual profits

The firm, which also runs visitor attractions including the Edinburgh Dungeon, Legoland and the London Eye, could be valued at about £3.5 billion and is believed to be eyeing a flotation in either London or New York.

A spate of successful initial public offerings (IPOs) in recent months – including builder Crest Nicholson and insurance firms Direct Line and Esure – has led to a resurgence of interest among companies seeking to raise capital.

Merlin chief executive Nick Varney told a Sunday newspaper: “It is incredibly encouraging to see what’s been happening, because the market has been closed for a long time, which is not good for companies or the London market.”

Merlin, which is owned by private equity firms Blackstone and CVC and Kirkbi – the family investment group behind Lego – is due to publish its annual results on Wednesday.

The firm is understood to have enjoyed a jump in sales of more than 10 per cent to £1bn last year, with operating profits up by about 12 per cent to £260 million.

The Poole-based company runs more than 90 attractions across 21 countries, including Sea Life centres at locations as diverse as Loch Lomond, Bangkok, Berlin, Kansas City and Helsinki.

In 2011, visitor numbers grew 13 per cent to 46.4 million, but that figure is believed to have risen to more than 50 million, making it the world’s second-biggest theme park operator behind Disney.

After years of subdued activity, the number of market flotations has risen strongly so far this year.

According to research from Dealogic, IPO volumes in London have raised $2.3bn (£1.5bn) so far this year – that compares with just $71m for the same period a year ago.

Esure’s market debut on Friday – which raised £554m for chairman Peter Wood, private equity firm Tosca Penta and members of the management team – was this year’s largest flotation in London and the second-largest in Europe behind German real estate group LEG Immobilien, which raised more than €1.2bn (£1bn) in January.

Greencoat UK Wind, an investment fund focused on buying wind farms, brought in £260m with its flotation on Friday, and cable equipment maker HellermannTyton is due to complete its London listing tomorrow.

Despite the renewed interest in the IPO market, insurance group Hastings has said it is in no rush to follow Direct Line and Esure with a flotation.

The company saw its profits double to £61m last year and chief executive Gary Hoffman – the former boss of Northern Rock and acquisitions vehicle NBNK – said: “We don’t need external funding to fund our growth plans. We are expanding rapidly, and we are creating our own capital to reinvest in the business.”

Bausch & Lomb, the eye care company owned by private equity firm Warburg Pincus, said on Friday that it was planning an IPO that is expected to value the group at up to $10bn.

Founded in 1853, the New York-based firm makes contact lenses, eye drops and surgical equipment and employs more than 11,000 people around the world. It was taken private by Warburg Pincus in 2007 for about $4.5bn.